One common approach to estate planning is to leave a home to children in one’s will. Does this give your child any current rights to your home while you are alive? Can your child then possibly take your home from you? The short answer to this question is no. A child named as beneficiary to the home in a will does not have any right to your home while you are still living. However, understanding why that is the correct answer requires a little more explanation.
Title Is Key
When it comes to real property such as a house, the person who has title to the property controls the property. The title holder, as the legal owner, can lease, mortgage, refinance, sell, gift, or do anything else with the property. When you purchased your home, you received title to it through a deed. This deed proves you are the owner, and gives you all rights to the property.
A Will Is Effective Only upon Your Death
A will is a legal document that spells out what happens to your property after your death. The key phrase here is “after your death.” A will does nothing for you during your lifetime. A will does not change title to property during your life, so naming your child in your will as the recipient of your home after your death does not give them any ownership rights to your home until after your death. Also, you can rewrite or change a will at any time during your life if you are still mentally able to do so. As a result, your child cannot take your home while you are still alive.
A Word of Caution
Using a will to give your house to your child at your death guarantees that they will have to go through the probate process to complete the title transfer. In an attempt to avoid probate, some people will put their child’s name on the deed to their home while they are living, with the intent of continuing to own the home while they are alive and passing the home to their child at the time of their death. As soon as you add another name on the deed to your home, they immediately become a co-owner. As a co-owner, they can do what any owner of property has the right to do: lease, mortgage, refinance, and so on. So, while naming your child in your will as the recipient of your home at your death does not give them the ability to take your home while you are still alive, putting your child’s name on the deed to your home would indeed give them–and their creditors–that ability.
If you wish to maintain control of your home while you are alive, provide that your child receives your home upon your death, and desire to avoid the probate process, there are estate planning tools such as a transfer-on-death deed or a revocable living trust that can accomplish all of these goals. Please schedule a meeting with us to discuss your unique goals and find out how a tailored estate plan can help you meet them.
